TMI Blog1997 (6) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 and 944 of 1991 sustaining a penalty of Rs. 50,000 under section 12B(3) of the Karnataka Sales Tax Act, 1957 (in short, the State Act only) and of Rs. 1,00,000 under section 18(2) of the Central Sales Tax Act, 1956 read with section 12B(3) of the State Act (in short, the Central Act only). 2.. The penalties pertain to the assessment year 1986-87. It is not in dispute that the assessee, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances, which led to the said defaults were that the assessee had to sell its machine tool on credit but it could recover the payments after the lapse of more than 90 days. It was also found that the application filed by the assessee for refund with the State Government towards generating electricity for their captive consumption owing to continuous power cuts, which had gone up to 85 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Orissa [1970] 25 STC 211 and in the case of Elestone Estates and Industries Ltd. v. State of Karnataka [1983] 54 STC 341 of this Court. Surprisingly, despite the said findings of fact and having rightly noticed the law in this regard, the Tribunal still sustained penalties to the extent of Rs. 50,000 under the State Act and Rs. 1,00,000 under the Central Act. We have failed to understand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, once the Tribunal comes to a conclusion that the defiance was not deliberate and there was no dishonest intention on the part of the assessee in not acting in accordance with law in payment of advance tax and that the contravention had occurred because of the circumstances beyond its control, it was contrary to the settled principles of justice and equity to have still subjected the assessee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the demand against the appellant-firm, amounts refundable to it or its partners should be ascertained by the concerned Income-tax Officer so that the demand may be executed only for the balance. 8.. In our opinion, in the present case also, before levying penalties, the assessing authority should have reasonably ascertained the amount which would have been refundable to the assessee only in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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